Submission by a Foreign Bank of Commercial Data to Internet Platforms Is Not Sufficient to Trigger the Jurisdiction of the Long Arm Statute of New York | Schlam Stone & Dolan LLP

On April 13, 2022, Judge Crane of the New York County Commercial Division issued a decision in Qatar v First Abu Dhabi Bank Pjsc2022 NYLJ LEXIS 410holding that a motion to dismiss a claim against a foreign bank for incompetence should succeed when the only contact the bank had with New York was allegedly the submission of quotes to internet trading platforms accessible worldwide and the maintenance of two corresponding bank accounts in the state, indicating:

“[A] The New York court cannot exercise personal jurisdiction over a non-domiciliary unless two conditions are met: the action is authorized under the Long Arm Law (CPLR 302) and the exercise of jurisdiction is consistent with due process” (Williams v. Beemiller, Inc., 33 NY3d 523, 528 [2019]). “If the law or the constitution [*4] prerequisite is lacking, the action may not take place” (id.).

Under CPLR 302(a)(1), “a court may exercise personal jurisdiction over any non-domiciled person…who, in person or through an agent…carries on commercial transactions in the State” (CPLR 302 [a] [1]). It is a “one-act statute”, which means that “evidence of a transaction in New York is sufficient to invoke jurisdiction, even if the defendant never enters New York, so long as the defendant’s activities here were intentional and that there is a substantial connection between the transaction and the asserted claim” (Kreutter v. McFadden Oil Corp., 71 NY2d 460, 467 [1988]). “Deliberate activities are those whereby a defendant, by voluntary acts, ‘envokes the privilege of carrying on activities within the forum state, thereby invoking the benefits and protections of its laws'” (Whitcraft v. Runyon, 123 AD3d to 812).

Jurisdiction under CPLR 302(a)(1) is not appropriate. Plaintiff alleges that Samba “transacted in New York” by submitting FOREX rate trading quotes for Qatari currency and bonds through trading accounts with Bloomberg and Reuters “on platforms and data centers located in New York County”. Plaintiff argues that Samba’s use of the platforms [*5] and data centers (servers), offered by Bloomberg and Reuters, for submitting foreign exchange quotes constitute business transactions in New York. Through the assertion of Abdullah Omar Al-Marshad, a rates trader employed by Samba, Samba claims that its traders use the services of Bloomberg and Reuters from Samba offices in Saudi Arabia and the United Arab Emirates (Doc 36 ).

Data submission [international rates quotes] by traders from foreign countries to globally accessible Internet trading platforms do not, without more, constitute “intentional activities” in New York, whether or not the data or platforms were maintained on servers located in New York (see Sonterra Capital Master Fund Ltd. v Credit Suisse Group AG, 277 F Supp 3d 521, 590 [SDNY 2017] [noting that “the happenstance that the electronic communications of defendants acting abroad were routed through a server in the United States cannot substantially contribute to a finding of sufficient contacts with the United States,” and ”

Furthermore, although Samba has two correspondent bank accounts in New York, there are no allegations in [*6] the grievance that these pen pal accounts played a role in the allegedly criminal acts. “[S]By itself, a correspondent banking relationship, without any other clues or evidence to explain its essence, may not form the basis of long-term competence” (Amigo Foods Corp. v. Marine Midland Bank-NY, 39 NY2d 391, 396 [1976]). Here, the plaintiff does not allege any facts from which the court can infer that the corresponding accounts played a role in the alleged fraudulent scheme, let alone caused the alleged harm.

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